Budget Proposes Targeted Cuts but Keeps Priority on Higher Education
Regents adopt UC budget request for the coming year and send
it to the state for consideration
Governor introduces state budget proposal
Legislature holds hearings on the budget; each house develops
a budget proposal of its own
State revenues are updated and governor issues the "May
Revision" to his original budget proposal
Legislature sends final budget to governor for action
June: Governor signs budget
1: New fiscal year begins
Regents update original UC budget request to conform to final
budget adopted by the state
1: Traditional date for most salary increases to take effect
you know by now, the State of California has entered a difficult
budget period. State revenues are down substantially, and
many areas of the government are bracing for spending reductions.
downturn is, of course, disappointing after California's economy
experienced such solid growth during the late 1990s. As a
state institution, the University of California will participate
in the actions that must be taken to balance the state's budget.
But we need to make every effort to do so in a way that preserves
the quality of our institution.
order to ensure that you, as a member of the faculty and staff
of the University of California, are kept up to date on the
latest budget developments, I have initiated this electronic
newsletter. It will be published on a periodic basis as events
warrant. I hope it helps answer your questions about the state
budget process and its impact on the UC system.
The newsletter will also be available on the web at www.ucop.edu/news/budget/
fiscal problems aside, I continue to have the greatest confidence
in the long-term strength and vitality of the University of
California. We have weathered the ups and downs of many economic
cycles, and we remain one of the top research universities
in the world. I credit our faculty and staff - the people
who do this institution's work - with that fine accomplishment.
you for your continued dedication and contributions to the
Gov. Gray Davis has submitted to the California Legislature a 2002-03
budget proposal that, while making targeted cuts at the University of
California to help address an estimated $12 billion state budget shortfall,
still places a priority on maintaining quality teaching and research programs,
preserving student access, and providing a modest salary boost for faculty
governor's proposal, UC's state-funded budget would total $3.4 billion
in 2002-03, roughly the same as the original budget for the 2001-02 year.
The proposal includes these major elements for the UC system:
Funding for an average merit increase of approximately 1.5 percent for
eligible faculty and staff (final salary increases, of course, are subject
to collective bargaining requirements where applicable). UC did not
receive funding it sought for an additional 2 percent increase for faculty
and staff and a further 2 percent increase for employees in positions
where compensation levels lag the market. The University will be pressing
for additional salary funding during budget negotiations this spring.
Funds to cover a 6.7 percent increase in the University's costs of providing
health insurance to employees. UC had requested a 10 percent increase
in order to keep employee contributions as low as possible, given the
rising costs of health care coverage.
enrollments: Funding for enrollment growth of 7,100 full-time-equivalent
students, a 4.3 percent increase over the budgeted amount for 2001-02.
This funding will allow the University to maintain its commitment of
access for all UC-eligible students as the state's college-age population
fees: Mandatory systemwide student fees would remain level, making 2002-03
the eighth consecutive year without a fee increase. However, unlike
previous budgets, the plan does not provide state funding to cover the
University's loss of the additional fee revenue it needs to maintain
support for existing fee-funded programs. The University will be discussing
this need with the Legislature and governor during this spring's budget
program cuts: These include a $4 million reduction for the California
Subject Matter Projects, which provide professional development for
K-12 teachers; a $4.2 million reduction for the university's outreach
programs to K-12 schools; and a $17 million elimination of "bonus"
funding for financial aid that the state had allowed UC to keep when
student fees were reduced in the late 1990s.
budget proposal does not fully live up to the Davis administration's "partnership
agreement" with the University, the administration has indicated
that it expects to resume its commitment to the partnership as soon as
the state's fiscal situation improves. More details about the governor's
budget can be found at www.ucop.edu/news/archives/2002/jan10art2.htm.
report by the state Legislative Analyst's Office suggests, however, that
the governor's budget would still leave the state with a $5 billion budget
shortfall and that lawmakers in Sacramento will need to find additional
savings to close the gap. Legislative hearings on the budget began in
will be working closely with the Legislature and the Davis administration
over the course of the spring, making the case for continued strong investment
in the University of California for the benefit of the state's educational
and economic health. A final budget is usually approved by early summer.
the Legislature and governor already have approved mid-year cuts in the
2001-02 budget to help close the state budget gap. The cuts made at UC
were: $25 million of the $75 million the state provided to UC to cover
increased energy costs; $6 million of the $57 million provided for the
UC-led California Professional Development Institutes for K-12 teachers;
$4.8 million of the $32 million provided to UC to expand K-12 schools'
access to the next-generation Internet2; and a $5 million unallocated
Considers Bond Measure, Acceleration of UC Projects
Meanwhile, the state Assembly has approved the placement of
bond measures for education facilities on the 2002 and 2004 ballots. At
publication time, the state Senate had not yet acted on the proposal.
measures would provide funding for facilities projects at all 10 UC campuses.
These projects are critical to UC's ability to accommodate growing numbers
of students, faculty and staff over the course of this decade; make seismic
and other life-safety improvements to existing buildings; and renew outdated
infrastructure on many campuses.
legislation passed by the Assembly includes the acceleration of funding
for seven UC facilities projects as part of a statewide
economic stimulus package originally proposed by Gov. Davis. Lease-revenue
bonds would fund the accelerated projects. A separate measure containing
the governor's proposal to use lease-revenue bonds to accelerate funding
for the four UC-based California Institutes for Science and Innovation
is still being discussed by the Legislature.
Q. Is this a "good" budget or
a "bad" budget for UC?
A. The governor's budget is not as generous as the budgets
of previous years, but given the state's current economic situation,
it still places a high priority on education. While the governor's
budget proposes targeted cuts in certain areas at UC, it also funds
the University's expected enrollment growth, provides modest merit
increases for faculty and staff, and supports the University's facilities
needs. The state Legislative Analyst's Office, however, believes
the state will still have to come up with more budget savings in
order to close its budget gap this year. How UC might be affected
is unclear at this point.
Q. What is the university doing to improve
A. The University is continuing to make the case in Sacramento
for competitive faculty and staff compensation, which is key to
quality programs. UC made gains in this area in the 1990s and is
concerned about losing ground now. It's also worth noting that the
Board of Regents has approved a special retirement augmentation
for faculty and staff to help compensate for the fact that salaries
are not growing as quickly as the University would like. For more
information on this special program, visit www.ucop.edu/news/archives/2001/nov16art1.html.
Why isn't a voluntary early retirement program being considered?
A. Based on what we have seen so far in this budget cycle,
it does not appear that major actions of this kind will be necessary.
Moreover, the loss of some of our most experienced faculty and staff
through such a program would be difficult at a time when UC is in
the midst of a major expansion of student enrollments.
a question? Send it to email@example.com.
Your submissions will be the source of the questions and answers
appearing in the next edition of this newsletter.
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